By the Blouin News Technology staff

A growing faultline splitting Europe: bitcoin

by in Enterprise Tech.

T.J. Kirkpatrick/Getty Images

T.J. Kirkpatrick/Getty Images

There is an increasingly distinct line between countries in Europe that embrace bitcoin and countries that don’t. While most of them have at least acknowledged that bitcoin is a widely traded and used virtual currency, even if they don’t know what to do about it, others — Denmark, for example — have fully welcomed the integration of bitcoin into their economies and made efforts to ensure its safe trade. But the facts that bitcoin is still definitely the choice method of payment for illegal goods and is easily hackable continue to prevent its total acceptance by governments and banks on a global scale. And in Poland, bitcoin exchanges recently found their accounts closed with regional payment processors for — what appears to be — security concerns and fraud risk.

CoinDesk reports that Polish payment processors CashBill and BlueMedia in addition to one bank in the country have closed the accounts of local bitcoin exchanges BitBay, Cryptoins.com, bitmarket24pl and Bitmarket.pl. Banks in Poland told those payment processing companies that their services with the banks would be terminated if they continued to do work with local bitcoin exchanges, so they cut them off. BlueMedia said that fraud risk was at play in its decision, and PKO Bank Polski — a huge bank in the country — said that the lack of secure regulation around virtual currencies has driven the bank to end work with bitcoin exchanges. While security and cybercrime are always concerns when it comes to bitcoin, it seems as though Polish banks are just making life hard for bitcoin owners and users in the country, and trading volumes have decreased for those affected exchanges.

This action on the part of national banks is indicative of the general skepticism surrounding bitcoin’s mainstream use in many countries. The lack of regulation has significantly deterred banks from wanting to do any business with any company related to bitcoin  — understandably so. The currency is volatile; global exchanges have collapsed over the last year; it is associated with massive underground marketplaces like the Silk Road; and the European Banking Authority has been vocal about the huge risks involved in making virtual currencies mainstream as they are so easily hacked.

So, while Poland is presenting challenges for bitcoin users, its concerns about the currency are not unfounded. Still, other European countries are moving full steam ahead towards bringing bitcoin into mainstream use. SpectroCoin, a European payment processor and bitcoin exchange, launched a debit card in early June that can be loaded with digital currency and can be accepted by merchants worldwide. BitStamp — another European bitcoin platform — issued a similar product in the form of a prepaid debit card, the bitcoins on which can be converted into euros, British pounds, or American dollars. Coinzone is launching a mobile bitcoin wallet for users in Europe. And the Swiss Federal Tax Administration has recently determined that — since bitcoin is a currency — no VAT applies to its exchange in the country.

Bitcoin’s legitimacy is growing in those ways despite its obstacles in countries like Poland. The fact remains that its exchange, trade, and use will thrive regardless of whether or not national financial institutions support it.